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SR-08-26-2014-3ECity Council Meeting: August 26, 2014 Agenda Item: 3, ®E. To: Mayor and City Council From: Martin Pastucha, Director of Public Works Subject: Award Custodial Services Contracts for Various City Facilities Recommended Action Staff recommends that the City Council: 1. Award Bid #4150 to Executive Suite Services, Inc., a California -based company, to provide custodial cleaning services at the Santa Monica Pier in an amount not to exceed $3,382,908; and to Lee's Maintenance Services, Inc., a California - based company to provide custodial cleaning services at various City facilities in an amount not to exceed $7,681,240. 2. Authorize the City Manager to negotiate and execute a contractual services agreement with Executive Suite Services, Inc., a California -based company, in an amount not to exceed $293,626 for custodial cleaning services at the Santa Monica Pier for FY 2014 -15 (including optional quarterly services and 20% contingency), with five additional one -year renewal options in a cumulative amount of $3,089,282, for a total amount not to exceed $3,382,908 over a five year and seven month period, with future year funding contingent on Council budget approval. 3. Authorize the City Manager to negotiate and execute a contractual services agreement with Lee's Maintenance Service, Inc., a California -based company, in an amount not to exceed $818,690 for custodial cleaning services at the Public Safety Facility, Santa Monica State Beach, the Civic Center, and City offices at various locations for FY 2014 -15 (including optional quarterly services and 20% contingency), with five additional one -year renewal options in a cumulative amount of $6,862,550, for a total amount not to exceed $7,681,240 over a five year and seven month period at the Public Safety Facility, the Civic Center, and City offices, and five year and nine month period at the Santa Monica State Beach, with future year funding contingent on Council budget approval. 4. Authorize the budget changes as outlined in the Financial Impacts and Budget Actions section of this report. 1 Executive Summary Custodial contract services are currently provided by six contractors for various locations via a combination of contracts and service agreements. In an effort to consolidate and obtain best pricing, in April 2014, the City solicited proposals for custodial contract services for all currently contracted locations, with options for Santa Monica State Beach and the Civic Center. Staff recommends Executive Suite Services, Inc. to provide custodial contract services at the Santa Monica Pier for a total amount not to exceed $3,382,908, and Lee's Maintenance Services, Inc. to provide custodial contract services at the Public Safety Facility, Santa Monica State Beach, office buildings, and the Civic Center for a total amount not to exceed $7,681,240. Background On August 10 2010, Council awarded Bid #2980 for custodial services at the Santa Monica Pier in an amount not to exceed $1,637,842 for a three and three quarter year term, and Bid #2987 for custodial services at the Public Safety Facility (PSF) to Diamond Contract Services, Inc. in an amount not to exceed $832,406 for a three and three quarter year term. On April 8, 2014, Council authorized contract modifications with Diamond Contract Services to extend contractual agreements 9255 -OS for custodial services at the Santa Monica Pier and 9256 -OS for custodial services at the Public Safety Facility on a month -to -month basis until a new contract is awarded and the contractor is ready to start operations, whichever comes first. On June 4, 2014, Diamond Contract Services, Inc., custodial services contractor for the Public Safety Facility (PSF), Santa Monica Pier, Animal Shelter, and 1730 4th Street, informed the City that all of their assets were to be sold to United Maintenance Company on June 9, 2014. Subsequently, staff discovered that the acquisition did not take place, but custodial contract services were assumed by United Maintenance Company, On July 9, 2014, the City Manager authorized payment up to $175,000 to United Maintenance Company for custodial services performed at the locations mentioned above from June 9, 2014 to June 30, 2014 in order to ensure uninterrupted custodial 2 services for the residents, tourists, and City employees at locations where contract custodial services are performed. On August 12, 2014, Council authorized a contractual services agreement with United Maintenance Company in an amount not to exceed $266,038 to provide interim custodial services at the Public Safety Facility, Santa Monica Pier, Animal Shelter and 17304 th Street on a month -to -month basis through December 31, 2014, or until a formal contract is awarded and contractor is ready to start operations, whichever comes first. Discussion A combination of in -house and custodial contract cleaning services has been used over the past several years to clean city owned and city leased locations. Locations with seasonal demands and leased office spaces are currently contracted out, whereas park restrooms, community centers, City Hall and libraries are maintained in- house. All locations included in this bid are currently contracted out with the exception of the Santa Monica State Beach, which is serviced by part -time temporary staff. Vendor Selection On April 30, 2014, the City published Bid #4150 for custodial services at the Public Safety Facility, Santa Monica Pier, Santa Monica State Beach, Civic Center, and City offices at various locations. The bid was posted on the City's online bidding website and notices were advertised in the Santa Monica Daily Press in accordance with City Charter and Municipal Code provisions. Fifteen bids were received and publicly opened on June 2, 2014 per Attachment A. Bids were evaluated based on price for each contract site, current municipal experience, qualifications, references and compliance with City specifications. On July 1 and July 2, 2014 staff interviewed six companies. Staff recommends Executive Suite Services as the best bidder for custodial services at the Santa Monica Pier and Lee's Maintenance Services as the best bidder for custodial services at the Public Safety Facility, Santa Monica State Beach, the Civic Center, and City offices at various 3 locations based on cost, understanding of scope of work required, municipal experience, ability to ensure proper staffing levels, and reporting tools used to ensure quality performance. Reference agencies reported the contractors' work was completed in a timely manner while maintaining consistent quality. The bid included an option for custodial services at the Santa Monica State Beach restrooms. These services are currently performed by part -time temporary staff who were notified in May 2014 that their employment would end in September 2014 because of limits on their hours due to CalPERS restrictions and the Federal Affordable Care Act. Scheduling has also been a challenge due to the seasonal and varied daily schedule needs for staffing. These issues have presented operational challenges because of the difficulty recruiting for part -time, short -term work and attracting qualified applicants. As a result, staff evaluated hiring new full -time employees or contracting employees to perform custodial services at the beach restrooms. This evaluation indicated that contracted services including negotiated cost of living adjustments compared to employee total compensation including salary increases and benefits would result in a savings of approximately $1.2 million over five years to the Beach Fund. The contractor would provide adequate schedule coverage. For instance, if a contracted employee is absent, the contractor can provide an immediate replacement, whereas City staff would have to attempt to absorb the duties by reducing work elsewhere or work overtime. The recommended contractor has committed to hire the current temporary employees on a probationary basis (120 days). Thus, the employees would receive the same minimum hourly wage under the Living Wage Ordinance and also receive benefits such as seven paid holidays, one week vacation after one year of service, and five days of paid jury duty that they do not currently receive as temporary employees. 19 With the contractor hiring the existing employees there will be no break in employment or see any reduction in pay. Employees would in fact receive benefits not previously afforded them. If the City chooses to provide the services with City employees there would be the required Civil Service Process and no guarantee that the existing employees would fill the new positions. In previous attempts these employees have not been successful in gaining appointment to full -time maintenance positions. If approved, new contractors would begin operations on October 1, 2014 at Santa Monica State Beach and on December 1, 2014 at all other locations, upon purchasing equipment required in the bid and complying with background checks. Alternatives Council could direct staff to pursue providing custodial services at the beach restrooms with City employees. The cost of contract custodial services at the beach restrooms is approximately $2.5 million over a five year period compared to $3.7 million if the same level of service was provided by City employees, resulting in an additional cost of approximately $1.2 million over five years to the Beach Fund. If Council directs staff to move forward with the proposed contract, staff estimates the Beach Fund would experience a deficit of approximately $2.2 million in FY 2020- 21. Should Council direct staff to provide services with City employees, projections show a deficit of about $4.0 million in FY 2020 -21. For comparison purposes, assuming no changes — based on current budget - staff estimates the Beach Fund would experience a deficit of approximately $1.7 million in FY 2020 -21 due to the planned capital program, and operating expenditures growing at a greater rate than revenues. b7 Financial Impacts & Budget Actions The contract to be awarded to Executive Suite Services is for an amount not to exceed $293,626 (includes optional quarterly services and a 20% contingency) for custodial cleaning services at the Santa Monica Pier for FY 2014 -15. Award of the contract requires an additional appropriation of $43,008 from Pier fund balance to account 30455.555010. The contract will be charged to account 30455.555010. Budget authority for subsequent budget years will be requested in each budget for Council approval. Future year funding is contingent upon Council approval and budget adoption. The contract to be awarded to Lee's Maintenance Service, Inc. is for an amount not to exceed $818,690 (includes optional quarterly services and a 20% contingency) for custodial cleaning services at the Public Safety Facility, Santa Monica State Beach, Office Buildings and the Civic Center for FY 2014 -15. The contract amounts will be charged to various accounts. Funds are available in the FY 2014 -15 budget within department operating budgets, and will be encumbered as needed. Budget authority for subsequent budget years will be requested in each budget for Council approval. Future year funding is contingent upon Council approval and budget adoption Prepared by: Sybille Moen, Sr. Administrative Analyst Carlos Collard, Sr. Administrative Analyst roved: Forwarded to Council: Martin Pastucha ( Rod Gould Director of Public Works City Manager Attachments: A — Bid Summary R Purchasing Section 1717 Fouts Street, Suite 250 Santa MoNoa, CA W401 RFQ: Telephone: 310-058 -8281 Fax 3103935142 TITLE Bid Results #4163 BID CLOSE: 06/02/2014 PROVIDE CUSTODIAL SERVICES FOR VARIOUS LOCATIONS WITHIN THE CITY OF SANTA MONICA, AS REQUIRED BY THE CUSTODIAL SERVICES DIVISION. DEDICATED DIAMOND 'BRITEWORKS EXECUTIVE SUITE '. LEE'S CBS INC BUILDING CONTRACT GOODWILL SERVICES MAINTENANCE SERVICES .SERVICES DESCRIPTION 'RESPONSE ! RESPONSE :RESPONSE RESPONSE RESPONSE + RESPONSE 1 RESPONSE JOB WALK TTENDENCE ATTENDED ATTENDED ATTENDED ATTENDED ATTENDED ATTENDED I ATTENDED PAYMENTTERMS NET30DAYS 11/2 %20 DAYS DESCRIPE ANY ADDITIONAL FEES .NONE NONE NONE AND CHARGES PRICING TO INCREASE OR RENEWAL OPTION SAME PRICE, DECREASE BY THE PERIOD 2(FIRST TERMS, AND SAME:'. ANNUAL RENEWAL CONDITIONS PERCENTAGEAS S %INCREASE :2 %INCREASE 11 /2 % INCREASE I OPTION) OFFERED : ) THE LIVING WAGE RATE INCREASE OR DECREASE PRICING TO INCREASE OR RENEWAL OPTION SAME PRICE, DECREASE BY THE PERIOD 3(SECOND TERMS,AND SAME`: ANNUAL RENEWAL ! CONDITIONS PERCENTAGEAS 0 %INCREASE 3 %INCREASE it/2 %INCREASE: OPTION) OFFERED THE LIVING WAGE RATE INCREASE OR DECREASE PRICING TO INCREASE OR RENEWAL OPTION - 2 %INCREASE OF DECREASE BY THE PERIOD 4 D SAME] ANNUAL RENEWAL RENEWAL PREVIOUSYEARS PERCENTAGE AS 3 %INCREASE 3 %INCREASE 1112 %INCREASE: OPTION) PRICE I' THE LIVING WAGE RATE INCREASE OR DECREASE PRICING TO INCREASEOR RENEWAL OPTION DECREASEBYTHE PERIOD 5 2% INCREASE OF SAME.' RENEWTH ANNUAL RENEWAL PREVIOUS YEAR'S PERCENTAGEAS 3 %INCREASE '3 %INCREASE 77/2 %INCREASE OPTION) PRICE : THE LIVING WAGE RATE INCREASE OR DECREASE PRICING TO INCREASE OR RENEWAL OPTION ° DECREASE BY THE PERIOD 0 (FIFTH SAME: ANNUAL RENEWAL PREVIOUS YEAR'S 1 PERCENTAGEAS 4 %INCREASE 4 %INCREASE 11/2 % INCREASE '. OPTION) PRICE THE LIVING WAGE '.. RATE INCREASE OR DECREASE WILL YOU BE ABLE TO COMPLY WITH CAN ' THEINSURANCE CAN COMPLY COMPLY /CANNOT CAN COMPLY REQUIREMENTS? 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P P N N N N Yi M N M n M � C 'c O mCi d W `N N N N N N N N N N m m m m `n_ `m_ `m_ `@ `m_ m ' m_ Nt.. c b b N U C NUNU �U NU NU NU NU NUNU v-U �U �U �U p T N C K K K K K K K K K K K K a Q as tOtt N 0 mt N N Y tr vtt� rm a, � m �ro t;ro _ '� m m - Z ro 4m m Z m i`N a O Z m Z m F N N N NN4 a N 9 CO Ul m � w Y O p V O O C o U O N O Y (; ° O 9 d N N QI C Y O i o D C Q C _ ® N @ 75 O y 0- L =O d 0I L , C LO L x Z w p m U C d C 2> o d U Q L � f F m U a N N Y N N N O t N N � N U , L o H � Z o O °o d° O 0] U On W V d Y_ d V v U Y IL K d a Q Y LL c O U1 N m c E E u E v c 0 a v m 9 O Q x Appendix VII- Pricing Sheet for additional DEDICATED DIAMOND Work requested - Contingency q 9 if :BRITEWORKS'. CBS INC BUILDING CONTRACT EXECUTIVE SUITE SERVICES 'SERVICES - SERVICES The City reserves the right to request additional Custodians and Lead Custodians for one -time cleaning, for special event cleaning, for new facilities that come on board during the length of the contract and that require cleaning, and for other cleaning services as requested and authorized by the Custodial Services Administrator. If during the length of the contract, cleaning requirements change and monthly schedules are reduced based on budget cuts, the City will reduce the monthly /annual rate by the hourly rate indicated below. Please indicate below the hourly rate: Hourly Rate- :Custodian $. 28,00 $ 23.13 $ 25.00 Hourly Rate -Lead "Custodian $ 35.00 $ 26.32 $ .30.00 Notes Appendix Vll- Pricing Sheet for additionalS LEE'S MERCHANTS s .. RUBRIC CLEANING work requested - Contingency q g Y GOODWILL MAINTENANCE BUILDING PRIDE INDUSTRIES SERVICES MAINTENANCE The City reserves the right to request additional Custodians and Lead Custodians for one -time cleaning, for special event cleaning, for new facilities that come on board during the length of the contract and that require cleaning, and for other cleaning services as requested and authorized by the Custodial Services Administrator. If during the length of the contract, cleaning requirements change and monthly schedules are reduced based on budget cuts, the City will reduce the monthly /annual rate by the hourly rate indicated below. Please indicate below the hourly rate: Hourly Rate- Custodian $ 24.00 $ 4 22.78 $ '. 25.15, $ 26.57 $ 22.88 Hourly Rate - Lead Custodian $ 26.00 $ 23.28 $ !. 28.85. $ :28.03 $ 25.92 Notes ! Regular, non- Includes ODC's overtime hours Appendix VII- Pricing Sheet for additional SANTA PE + } ;. PRIORITY WEST COAST LOT. Work - requested Contingency q g Y BUILDING ': TJS SERVICES UNISERVE BUILDING RESTORATION CO. - MAINTENANCE °SERVICES The City reserves the right to request additional Custodians and Lead Custodians for one -time cleaning, for special event cleaning, for new facilities that come on board during the length of the contract and that require cleaning, and for other cleaning services as requested and authorized by the Custodial Services Administrator. If during the length of the contract, cleaning requirements change and monthly schedules are reduced based on budget cuts, the City will reduce the monthly /annual rate by the hourly rate indicated below. Please indicate below the hourly rate: Hourly Rate- Custodian $ 25.12 $ 24.14 Hourly Rate -Lead Custodian $ 28.00 $ (. 24.93 Notes